In recent years, the United Arab Emirates (UAE) has gained eminence among investors and startup companies seeking to set up companies in the MENA region.
One of the recent changes affecting company formation in UAE freezones is the introduction of a 9% corporate tax rate for companies with profits exceeding Dhs375,000.
As an investor or entrepreneur, starting a company in a UAE freezone is straightforward and comes with endless benefits, such as 100% foreign ownership of your company.
In this article, we will shed more light on how you can register a company in UAE freezones.
Overview of a Freezone Business Setup in UAE
Freezones are designated areas within the UAE established to encourage international trade and attract foreign investors by providing a tax-free business environment and the ability to fully own your company in the UAE without the need for a local sponsor.
With over 50 free zones across the UAE, company formation in the UAE free zone is straightforward and can be done remotely (without you residing in the UAE).
Some of the benefits of freezone business setup in UAE include:
- 100% Ownership: Business setup in the UAE freezone allows you to have full ownership of your business.
- No Custome Duties: Freezone companies are exempt from customs duties within the designated freezone.
- 100% Confidentiality: Your business information, such as shareholders and financial records, are kept private.
- Remote Setup Procedure: You can set up your company in the UAE freezone without residing inside the UAE.
- 100% Repatriation of Profits: Investors can repatriate all their profits and capital of their freezone company without any restriction.
Also, as we know, everything with an advantage comes with a disadvantage.
Some disadvantages of freezone company formation in UAE include:
- Geographical limitation: Companies registered within a freezone are restricted from conducting business outside the freezone jurisdiction.
- Limited office Space: You are only allowed to lease an office space inside your designated freezone area.
- Limited market access: A freezone company in the UAE can only do business within its jurisdiction, thus limiting access to explore the entire UAE market.
Business Structures in UAE Freezones
Freezone company formation in the UAE is straightforward and cost-effective as compared to mainland business setup in UAE.
Just like elsewhere, understanding the legal structures of company registration in UAE free zones is vital.
The UAE offers two main types of business structures.
- Freezone Establishment (FZE): An FZE in UAE allows a single owner to setup a company in a freezone. Meaning you own 100% of your company without the need for a shareholder.
- Freezone Company (FZC): An FZC in UAE allows up to 5 shareholders in a single company.
Getting a Business License in UAE Freezone
A business license is a legal document issued by the Department of Economy and Tourism (DET)that specifies what activity a company may engage in in the UAE.
The UAE offers 4 main types of business licenses, i.e., Commercial, Industrial, Professional, and Tourism licenses.
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List of Freezones in UAE
The UAE is home to more than 50+ freezones, with each catering to different industries and business activities.
Here’s a list of some major freezones across the UAE:
- Jebel Ali Free Zone (JAFZA)
- Dubai Multi Commodities Centre (DMCC)
- Dubai Airport Free Zone (DAFZA)
- Dubai International Finance Centre (DIFC)
- International Free Zone Authority (IFZA)
- Meydan Free Zone
- Sharjah Airport International Free Zone (SAIF)
- Dubai South (Dubai World Central)
- Dubai Silicon Oasis Freezone ( DSO)
- Ajman Freezone (AFZ)
- Sharjah Media City Freezone ( SHAMS)
- Dubai CommerCity Freezone
- Ras Al Khaimah Economic Zone (RAKEZ)
- Dubai Internet City ( DIC)
- Abu Dhabi Airport Free Zone
- Fujairah Creative City
- Dubai HealthCare City
Choosing the Right Freezone in UAE
To establish a business in a free zone in UAE, you must understand the requirements and objectives of your business and that of your desired free zone authority.
We recommend seeking advice from an expert business setup consultant in UAE, like Corporate Business Services (CBS), who will guide you in understanding your business to choose the right freezone that best meets your needs.
Here, we will give you a few tips for selecting the right freezone to start your UAE business.
- Decide and choose a freezone that aligns with your business goal and objectives.
- Consider the geographical location of the freezone, providing easy access to your target customers.
- Evaluate the infrastructure and facilities the freezone offers, such as warehouses, office space, etc.
- Compare the cost of company formation with other freezones to make decisions based on your budget.
- Inquire on the maximum number of visas required under a single license.
- Have a proper check on the reputation and services offered by the freezone.
Procedure for Freezone Company Formation in UAE
Certainly, here are the simplified steps for setting up a freezone company:
- Determine your legal structure and business activity.
- Choose your desired free zone authority.
- Choose and reserve your company name.
- Compile all necessary documents and apply.
- Get initial approval and secure office space.
- Pay for the license and other fees.
- Obtain your business license and apply for visas.
- Open a corporate bank account for business transactions.
- Begin Business Operations.
Consult Expert Business Setup Advisor
Keep in mind that specific requirements and procedures may vary between different Free zones across the UAE. It’s advisable to work with a business setup consultant like CBS, who is well-versed in the processes of company formation in UAE.
At Corporate Business Services (CBS), we can guide you in choosing the best freezone in UAE for your business needs.
For more information, you can book a free consultation with our expert business advisors in UAE, who will call you within 1 business day for a 30-minute online session.
Frequently Asked Questions
To get a trade license in the UAE free zone, you will need to submit the following documents:
Passport copy of the business owner.
An application form from the freezone authority
Copy of passport-size photo.
Copy of UAE resident /visit Visa (If applicable)